(AsiaGameHub) –   Evolution Gaming attributed a further dip in first-quarter revenue to declining channelisation rates throughout Europe.

The company announced Q1 net revenue of €513 million, a 1.5% decrease compared to the same period last year. On Wednesday, Group CEO Martin Carlesund informed analysts that regional performance “was somewhat mixed in the quarter, [as] Europe is not performing well at the moment”.

Based on customer IP address data, Carlesund approximated that 48% of its Q1 revenue came from regulated markets.

Commenting on the European performance, the CEO stated, “Because regulation in certain markets fails to achieve the correct balance between player protection and entertainment, customers continue to use unlicensed operators, and channelisation is falling rapidly and substantially. This damages the entire business, and the most vulnerable players lose the protection offered by regulated operators while still seeking out Evolution’s products.”

He pinpointed inadequate channelisation in the UK, the Netherlands, and Sweden as particular areas of concern.

LatAm has ‘great momentum’

In contrast, he noted that Latin America possessed “great momentum,” while North America was experiencing “steady growth.”

“Both North America and LatAm achieved another record revenue high. The growth rate in North America accelerated from the fourth quarter. It appears somewhat soft when reported in euros, but in US dollars, the year-on-year growth was approximately 21%, up from 19% in Q4,” Carlesund remarked.

He clarified that the firm is reorienting its focus from Europe to the Americas, citing the recent launch of several major new games and the acquisition of an Argentine developer. He referred to Europe as “the primary headache at present.”

“The US and LatAm are the regions where we plan to concentrate the majority of our investments in 2026. Both areas possess significant potential, as they are still in the early stages of development,” Carlesund further added.

Regarding other markets, he mentioned that Africa continues to expand, albeit from a modest starting point. “New games are very popular there, and our recently launched Red Baron has surpassed expectations. Additionally, our real-money gaming (RMG) portfolio is beginning to gain popularity.”

Europe remains attractive in long term

Despite Carlesund’s negative short-term view of Europe, the company remains optimistic about its long-term prospects. He told analysts that regulatory shifts are responsible for the current challenges, but he believes “regulators will ultimately have to adopt and adapt to safeguard players, and through appropriate regulation, not force, encourage them back into the regulated market.”

Last year, Evolution implemented ring-fencing measures for its European operations to prevent its services from supporting the black market. This action was a response to an investigation by the UK Gambling Commission into its activities within the UK’s illegal market.

Carlesund had previously expressed regret over the substantial cost of this initiative in 2025, which negatively affected overall profitability.